S&P trims General Dynamics

S&P said it downgraded General Dynamics Corp. to A from A+ on concerns the company’s credit measures are likely to weaken.

“Credit ratios are likely to improve, but remain below our previous expectations for the next two years. Following the $10 billion mostly debt-financed acquisition of CSRA Inc. in 2018, credit ratios have not improved as we had expected at the time, due to weaker cash flows and higher share repurchases, as well as increases in pensions and lease liabilities,” said S&P in a press release.

The outlook is negative.

Moody’s upgrades Kinross Gold

Moody’s Investors Service said it upgraded Kinross Gold Corp.’s senior unsecured notes rating to Baa3 from Ba1 and withdrew Kinross’ Ba1 corporate family rating, Ba1-PD probability of default rating, and the SGL-1 speculative grade liquidity rating.

"The rating has been upgraded because Kinross’ cash cost position is in line with that of investment-grade rated gold-mining peers, the company will be able to maintain production levels through its projects including the expansion at Tasiast, and we expect it to maintain its conservative financial policies," said Jamie Koutsoukis, a Moody’s vice president, senior analyst, in a press release.

The agency changed the outlook to stable from positive. Moody’s said it expects Kinross to keep costs in line with its investment-grade peers, maintain low leverage and steady production.

DBRS ups Rogers Communications

DBRS said it upgraded the issuer and senior unsecured notes ratings of Rogers Communications Inc. to BBB (high) from BBB. DBRS also changed the trends to stable from positive.

The upgrades reflect Rogers’ operating and financial execution in 2019. The ratings are supported by the company’s role as a leading wireless and cable TV operator in Canada, increasing revenue diversification and solid free cash-generating capacity. The ratings also consider intensifying competition, evolving consumer habits that negatively affect the cable TV and telephony businesses, as well as risks associated with regulatory change.

The stable trend mirrors the company’s steady operating outlook amid a rapidly changing competitive environment, improvement in its cash generation and ability to maintain a sustainable level of leverage for the rating, DBRS said.

Fitch revises Capri view to negative

Fitch Ratings said it changed the outlooks for Capri Holdings Ltd. and Michael Kors (USA), Inc. to negative from stable.

“The outlook revision reflects concerns that weaker-than-expected topline trends, combined with lower-than-expected debt reduction, could combine to yield adjusted debt/EBITDAR (capitalizing leases at 8x) sustained above the low-3x range, which is Fitch's downgrade sensitivity, over the next 18 to 24 months. Stabilization of the rating would require increased confidence that Capri can meaningfully improve adjusted debt/EBITDAR from the forecasted 3.9x level in 2019 to the low 3x range in 2020 through a combination of debt reduction and EBITDA breaking out of its recent $1.1 billion to $1.2 billion range,” said Fitch in a press release.

Fitch also affirmed the BBB- ratings on Capri and Michael Kors.

S&P shifts Eli Lilly view to negative

S&P said it revised its outlook on Eli Lilly & Co. to negative from stable and affirmed the company’s A+ long-term rating.

“The negative outlook reflects Lilly's 2019 adjusted debt leverage of 2.1x, which we view as elevated for the current rating. This was further exacerbated by the $900 million of share repurchases it completed in the second half of 2019, which the company undertook despite its weakened credit measures. Moreover, Lilly's $1 billion acquisition of Dermira, which closed at the end of February, leaves the company vulnerable to a downgrade if it fails to prioritize its cash flows for deleveraging over the next 12 months,” said S&P in a press release.

S&P revises Nippon Steel view to negative

S&P said it revised the outlook for Nippon Steel Corp. to negative from stable.

“The revision on the outlook is based on our view that the company's profitability, which has already deteriorated, will remain under strong downward pressure in the next one to two years. The business environment in major steel markets in Japan and abroad is likely to be increasingly challenging. The revision also reflects our expectation that the company's key financial ratios may recover more slowly than set out in our assumptions, despite measures it is taking to reduce its financial burden, such as streamlining operations and selling assets,” said S&P in a press release.

The agency affirmed the long-term issuer credit and long-term senior unsecured ratings at BBB.

Moody’s: Reckitt Benckiser view to negative

Moody’s Investors Service said it changed the outlook of Reckitt Benckiser Group plc and its guaranteed subsidiary, Reckitt Benckiser Treasury Services plc to negative from stable.

The change in outlook mirrors the announcement of added investments of £2 billion, most of which will be funded by a productivity program but will also reduce operating margins and free cash flow generation over the next three years. In addition, there is increased uncertainty over the company’s ability to reduce leverage in line with the requirements for the assigned rating, the agency said.

Concurrently. Moody’s affirmed the company’s A3 long term issuer rating. The rating agency also affirmed the A3 backed senior unsecured ratings of Reckitt Benckiser Treasury and the A3 backed senior unsecured ratings of Mead Johnson Nutrition Co.

S&P revises Reckitt Benckiser view to negative

S&P said it revised the outlook for Reckitt Benckiser to negative from stable and affirmed its A- long-term ratings.

The negative outlook indicates S&P could downgrade the company if by 2021 the new business plan does not ultimately start to have a positive effect, profitability stays depressed and credit metrics remain weak for the current rating.

On Thursday, the CEO presented a strategic plan to address structural issues at the company that caused a slowdown in organic growth and weaker profitability, particularly in the health division. “The comprehensive actions outlined in the strategic plan, including the revision of variable compensation and increased investments in research and development could reinvigorate the company. However, the immediate impact on its financial metrics is negative,” said S&P in a press release.

S&P puts Sirius on watch

S&P said it placed its A- ratings on the core operating subsidiaries of Sirius International Group Ltd. on CreditWatch with negative implications. The agency also placed its BBB rating on holding company Sirius International Group on CreditWatch negative. In addition, S&P placed its ratings on Sirius' senior and subordinated debt instruments on CreditWatch with negative implications.

The CreditWatch placements follow the announcement that majority shareholder CM Bermuda Ltd. is attempting to prevent Sirius from approving a share issuance without first getting approval from 75% of its shareholders.

“We think the request for consent follows a divergence of views between Sirius' management and its majority shareholder, CMB, over the group's future capital strategy,” said S&P in a press release.

S&P said it intends to resolve the CreditWatch placement once it understands how both Sirius and its majority shareholder intend to proceed with regards to the share issuance. “We think this should become clearer within 90 days,” the agency said.

S&P revises PartnerRe view to positive

S&P said it revised the outlook for PartnerRe Ltd. to positive from stable after Covea group announced plans to acquire the company for $9 billion from EXOR.

The agency said it will view PartnerRe as strategically important to Covea and that PartnerRe could benefit from stronger support as part of a higher-rated group with a strong balance sheet.

S&P affirmed PartnerRe’s A- long-term issuer rating and the issuer ratings of its core subsidiaries.

Fitch assigns Affinity Water BBB-

Fitch Ratings said it assigned Affinity Water Ltd. a long-term issuer default rating of BBB- with a stable outlook. Fitch has also assigned Affinity's class A senior secured debt a BBB+ rating and senior secured class B a BBB- rating.

The ratings reflect Affinity's current and forecast financial profile during the next price control starting in April, as well as its relative positioning versus rated peers. The rating is supported by the low risk, regulated nature of the company's business.

“We also factor in the middle-ranking overall regulatory performance of AWL compared with peers and the impact of historical and forecast outcome delivery incentives (ODI) penalties on its financial profile. At the same time, we recognize the company's efforts and commitment to improving operational and regulatory performance in the more challenging next regulatory period,” said Fitch in a press release.

Moody's rates Canadian Pacific notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to Canadian Pacific Railway Co.'s new $500 million of senior unsecured notes due 2030.

Proceeds will be used by Canadian Pacific primarily for the reduction and refinancing of its indebtedness and for general corporate purposes. The company's existing ratings are unchanged, including the Baa1 senior unsecured notes rating. The outlook is stable.

DBRS rates Choice notes BBB

DBRS said it assigned ratings of BBB with a stable trend to Choice Properties Real Estate Investment Trust’s C$400 million of 2.981% series N senior unsecured debentures due March 4, 2030, and C$100 million of 3.827% series O senior unsecured debentures due March 4, 2050. The ratings assigned to these newly issued debt instruments are based on the rating of already-outstanding series of senior unsecured debentures.

The debentures are direct senior unsecured obligations of Choice Properties and rank equally and rateably with all other unsecured and unsubordinated indebtedness of the trust. The debentures are guaranteed by Choice Properties LP, rated BBB with a stable trend by DBRS, Choice Properties GP Inc. and any other wholly owned subsidiaries of Choice Properties.

The trust will use the proceeds to repay indebtedness, including to fully redeem the C$250 million of Choice Properties’ 2.297% series E senior unsecured debentures due Sept. 14, and to repay a portion of the balance drawn on the trust’s credit facilities.

Fitch assigns Honeywell notes A

Fitch Ratings said it assigned an A rating to Honeywell International Inc.'s planned issuance of euro-denominated senior unsecured fixed-rate notes. The notes are expected to consist of a mix of maturities.

Proceeds will be available for general corporate purposes. The new notes will boost Honeywell's liquidity following the repayment of €1 billion of 0.65% notes last month.

The outlook is stable.

S&P rates Honeywell notes A

S&P said it assigned its A issue-level rating to Honeywell International Inc.’s proposed euro-denominated senior unsecured notes. The company is expected to offer the notes in two tranches, with a €500 million tranche due 2024 and a €500 million tranche due 2032, respectively.

Honeywell will likely use the proceeds to replenish its cash balance and for other general corporate purposes. The company recently used cash on hand to repay its €1 billion 0.65% senior notes that were due last month.

All of S&P’s other ratings on the company remain unchanged.

DBRS assigns Hydro One notes A

DBRS said it assigned ratings of A (high) with stable trends to Hydro One Inc.’s C$1.1 billion medium-term notes offering, which is composed of C$400 million of 1.76% (series 45) due 2025, C$400 million of 2.16% (series 46) due 2030 and C$300 million of 2.71% (series 47) due 2050. The ratings are based on the ratings of other already outstanding series of medium-term notes.

Proceeds will be used to repay long-term and short-term debt and for general corporate purposes. The notes will be direct, unsecured obligations of Hydro One and rank pari passu with all the company’s other unsecured and unsubordinated indebtedness.

Fitch assigns Texas Instruments notes A+

Fitch Ratings said it assigned an A+ rating to Texas Instruments Inc.'s $750 million of five-year senior notes. The senior notes are pari passu with the company’s senior unsecured debt.

Proceeds will be used for general corporate purposes. Pro forma for the senior notes issuance, Fitch rates $8.6 billion of Texas Instrument's total debt, including the $2 billion revolving credit facility. The outlook is stable.

S&P rates Texas Instruments notes A+

S&P said it assigned its A+ issue-level rating to Texas Instruments Inc.'s new senior unsecured notes.

The company will use the proceeds for general corporate purposes, including to refinance upcoming debt maturity.

“We rate the new note the same as our long-term issuer credit rating on Texas Instruments. All of our other ratings on the company are unchanged,” said S&P in a press release.

Moody's gives A2 to Honeywell notes

Moody's Investors Service said it assigned A2 ratings to Honeywell International Inc.'s new senior unsecured euro-denominated notes due 2024 and 2032. The issuances do not affect other ratings of Honeywell, including the A2 senior unsecured rating. The outlook is stable.

Honeywell's A2 debt ratings reflect the company's very large portfolio of businesses that contribute strong and stable operating profit from each segment. Moody's expects Honeywell to generate EBITA margins close to 20% and free cash flow of at least $3 billion annually.

Proceeds will be used for general corporate purposes. However, as the company recently repaid about the same amount of euro-denominated notes that matured on Feb. 21, Moody's views this transaction as debt-neutral.

Moody’s revises Mitsubishi Electric view to

Moody’s Investors Service said it affirmed Mitsubishi Electric Corp.’s A1 issuer rating and changed the outlook to negative from stable.

The outlook change to negative reflects Mitsubishi’s overall margin being under pressure from a fall in profit in its key industrial automation systems segment.

The ratings affirmation recognizes the stabilizing effect from Mitsubishi’s diversification that helps mitigate its exposure to the cyclicality in some of its businesses. The other businesses, however, aren’t able to fully offset the loss of the decline in the industrial automation segment, which accounts for almost half of Mitsubishi’s total profit. The coronavirus outbreak adds further uncertainty and pressure, Moody’s said.

Fitch gives Sherwin-Williams notes BBB

Fitch Ratings said it assigned a BBB rating to the Sherwin-Williams Co.'s offering of senior unsecured notes. The notes will be equal in right of payment with all other senior unsecured debt.

The company intends to use the proceeds, along with cash on hand, to repay its $428.9 million of senior notes due May 15, 2020, and to fund the redemption of up to $500 million of its 2.75% senior notes due 2022 and 4.2% senior notes due 2022 in a tender.

The transaction will be leverage-neutral. Fitch currently rates Sherwin-Williams' long-term issuer default rating and unsecured notes BBB. The outlook is stable.

Fitch affirms, withdraws StanCorp ratings

Fitch Ratings said it affirmed and withdrew the ratings of StanCorp Financial Group Inc. and its operating subsidiaries. Fitch rated StanCorp A- and its senior unsecured debt BBB+. The ratings were withdrawn for commercial reasons.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.